ON-LINE AND ADAPTIVE OPTIMUM ADVERTISING CONTROL BY A DIFFUSION APPROXIMATION.

A diffusion approximation to a stochastic advertising model of the M. L. Vidale-H. B. Wolfe type is formulated. This formulation allows solution of problems of optimum and on-line sales forecasting, parameter identification, and advertising control under uncertainty. Approximations are suggested and simulation used to forecast the probabilistic response of sales to an advertising program. Examples contrasting the stochastic process and the diffusion approximations approaches are included.